Organized 'sabotage' undermines Iraq's crude oil deliveries

June 23, 2003
Even as oil tankers are preparing to lift the first exports of Iraqi crude since the outbreak of the US-led war in March, organized sabotage continues to undermine efforts to restore the country's oil and gas production to prewar levels.

Even as oil tankers are preparing to lift the first exports of Iraqi crude since the outbreak of the US-led war in March, organized sabotage continues to undermine efforts to restore the country's oil and gas production to prewar levels.

"We are currently producing just short of 600,000 b/d (of oil), which is probably about the domestic demand," Ambassador L. Paul Bremer, Washington's top administrator for Iraq, told the House Armed Services Committee June 12 by closed-circuit television from Baghdad.

"We will be ramping that production rate up to a level of about 1.5 million b/d by the end of the year, and maybe more. So we will be able to export a substantial amount of oil, even after we have depleted the last barrelsUthat are now in storage in the pipeline to Turkey, Bremer added.

Pipeline 'sabotage'

But even as Bremer spoke, the Iraq-Turkey oil pipeline suffered two explosions that will hinder the country's export capacity, according to the US-appointed Iraqi Oil Minister Thamir Ghadhban.

"There is an incident in the pipeline somewhere near Baiji refinery. We are now assessing and evaluating the damage. I don't know exactly how it happened, and why it happened, but we will do our best to fix it.

"It will affect export capability. It is a pipeline and any incident in a pipeline would affect exports, but it can be repaired," Ghadhban told Reuters in an interview.

In Ankara, Turkish Foreign Minister Abdullah Gul said the pipeline had been sabotaged and an investigation was under way. But US Army spokesman Capt. John Morgan said the explosions appeared similar to previous accidents, and dismissed reports of deliberate bombing. The pipeline was still burning early last week, reports said.

LPG plant damage

Bremer is well aware of acts of sabotage from Iraqi diehards that have hindered US efforts to restore the country's oil exports. He told congressmen of destruction to Basra's South Gas LPG plant (SGLPG), which he visited June 11. "It was a pure act of political sabotage, almost certainly, by elements of Baathists who want to show that the coalition is unable to run this country," Bremer said, adding, "we still face this kind of activity, and we need to defeat it."

SGLPG, which produces about 50% of Iraq's LPG, is not operational because of sabotage to equipment and a lack of adequate electricity. According to Jabbar Al Eaby, the facility's director, it was professionals who carried out the sabotage since they knew "exactly" how to most severely damage the plant's equipment.

Although it was anticipated at the time that electricity would be restored by June 13, the parts to repair the plant's damaged equipment were not to become available until a later time. Al Eaby, who escorted Bremer through the SPLPG, could not even estimate when the facility would be back online.

Oil deliveries continue

While the explosions along the Iraq-Turkey pipeline have already raised concerns over the continued security of the country's oil operations, whether from sabotage or operational defects, the blasts will not affect Iraq's first oil tender since the outbreak of the war.

Iraq's State Oil Marketing Organization (SOMO) June 12 awarded 5.5 million bbl of Kirkuk crude to Spain's Repsol-YPF SA, Cepsa SA, Turkish refiner Tupras, and Italy's ENI SPA. SOMO also awarded 2 million bbl of Kirkuk crude to Total SA and a further 2 million bbl of Basra crude to ChevronTexaco Corp.

Oil shipments totaling 9.5 million bbl will be taken from stocks of some 9 million bbl of crude from Iraq's northern Kirkuk fields at the Turkish terminal of Ceyhan on the Mediterranean Sea and 2 million bbl of Basra Light lifted in the south—almost all of it pumped before the outbreak of war in March.

Shipping sources on June 15 said the 147,275 dwt tanker Sandra Tapias, owned by Spain's Tapias Naviera F. SA, was to arrive at Ceyhan on June 20 to lift 1 million bbl of Iraqi oil, the first loading from Ceyhan since Mar. 20, when US air attacks commenced against targets in Baghdad.

The Iraq-Turkey pipeline, which has been idle since Apr. 10, when Kurdish forces allied to the US took over the town of Kirkuk, is expected to resume operations after a few vessels are loaded and space becomes available, assuming there are no further incidents along the line.